Hi all, My property manager collects rent from my tenants at the start of each month. For whatever reason, I receive 50% halfway through the month, and the other 50% at the end of the month. Last month (June), I didn't recieve the 2nd payment until today (3rd July). My question is, should this 2nd payment be included in my 2016-2017 tax return, or 2017-2018 tax return? The rent was recieved from the tenant at the start of June, but unsure if it matters when it hit my bank account.... Thanks
You should be receiving everything that is in the ledger. Why are they withholding funds for no reason?
If the agent holds it in a bank account on your behalf you have received it. Simply because the monies held in trust for you have not passed over from beneficial ownership to legal ownership does not affect the derivation point of the rental income. So the second payment is taxable in 17.
Constructive receipt rule. The agent is your...agent. The agent annual statement would include it anyway. They delaying in banking isnt a factor to exclude it. Even if the agent holds back funds to meet an expected costs the income remains income BUT make sure if thats the case the deferred cost is also reflected correctly. eg that $650 repair bill they withheld for may be deductible at June 2017.
